Monthly Archive: June 2017

Vettel vs. Hamilton incident at Baku – what it tells us about rule enforcement in Formula 1 and sports

A lot of light heat and sound is being created over the incident during a Safety Car period in the European Grand Prix at Baku where Sebastian Vettel, angry at what he thought was an incident of Lewis Hamilton brake-testing him at the exit to a corner, drove alongside Hamilton and then deliberately bumped him.
Vettel was penalized for the incident by being given a stop-go penalty. Predictably, opinion is split between people who believe that Vettel was not punished severely enough, and should have been disqualified, run out of town on a rail etc. etc. and people who believe that the incident was a storm in a teacup between two competitors, and that the media is against Vettel (in the case of the UK media, it must be because Vettel is German and “Don’t Forget Ze Var!”).
Lost in a lot of the discussion is that Vettel has a track record of behaving petulantly on-track. There was the infamous “Multi 21” incident in a race in 2013, where Vettel essentially refused to obey team orders to let Mark Webber pass him on-track, and then lawyered up to weasel out of punishment from the team. More recently, last season Vettel unleashed a string of expletives at Charlie Whiting in a race after another incident. So his behavior in Baku was not exactly new, nor was it totally unpredictable.
There is a simple reality at work here. Competitors in any sport will do what they think they can get away with. They will read the rules, watch how other successful past and current competitors and their role models in the sport behave, and then go out and push the rules to their limits. Talk about “the spirit of the rules” would be regarded by hard-core sports competitors as so much naive fluff. In the case of Sebastian Vettel, he has made no secret of the fact that Michael Schumacher was his hero growing up, and Lewis Hamilton has made no secret of his reverence for the late Ayrton Senna. Both men, as drivers, were bristlingly and uncompromisingly competitive, and both pushed the rules and norms of the sport up to (and in some cases, beyond) previously accepted limits.
It is up to the rule enforcement bodies in a sport to determine what the competitive limits are, and what to do about incidents where competitors go over those limits.
Unfortunately, most competitive sports governing bodies merely fine competitors or put them on probation. Partly this is because many sports leagues are essentially run by team owners, and team owners, as a general rule, do not like to see their highly-paid star performers sitting disconsolately off to one side while the game or event takes place without them. The same applies to Formula 1, where teams like Ferrari would be publicly indignant if one of their drivers was suspended. However, as Joe Saward explains in this commentary, the FIA may be about to come down hard on Vettel for several reasons, and Ferrari, who have been behaving like a bunch of horse’s asses towards the media for months, are likely to find that there is no reservoir of sympathy for them.
However, trying to regulate competitor behavior with fines and probationary warnings never works. Most fines are chump change to athletes earning millions (and some cases, tens of millions) or dollars annually. They will regard a fine as merely part of the cost of doing business.
Competitors will only change their behavior if their actions cause them to be denied the opportunity to compete. Competing is what they live for.
So…any discussion around consequences for Sebastian Vettel’s actions in Baku involving monetary fines, penalty points or minor losses of grid position is total fluff. If he is guilty of dangerous driving, the FIA should have suspended him for 1 race, or disqualified him from the race in Baku and then made him start the next race from the pit lane with a 10 second penalty on the rest of the field.
It is my belief that if the FIA had suspended Ayrton Senna for 5 races and docked him 25 championship points for running into Alain Prost back in 1990 at Suzuka, we wouldn’t have to had to watch this incident, or the Schumacher-Hill and Schumacher-Villeneuve incidents in 1994 and 1997. The message would have been sent along time ago to formula 1 competitors “if you collide with another driver deliberately, it WILL cost you a championship”. The current behavior patterns by drivers are the direct consequence of 20+ years of pussyfooting and inaction by the FIA.
UPDATE – Whenever I read articles talking about “making an example” of a competitor to “send a message”, I know I am dealing with a scenario where a sport has failed to correctly regulate competitor behavior in the past. If Sebastian Vettel, for example, knew in advance that running into Lewis Hamilton would have resulted in an immediate black flag, preferably supported by past incidents where drivers were black-flagged, he would most probably not have run into Hamilton.


The awakening of the UK farming Industry..Part 3

Another AHA! moment as the UK farming industry suddenly appears to engage its brain about the practical consequences of Brexit. The soft fruit industry now realizes that without boots on the ground to pick the produce, the industry is likely to contract and possibly disappear.
As is now becoming usual, their public begging and pleading statement is a hoot.

British Summer Fruits chairman Laurence Olins said: “It is inconceivable that people who voted to leave the European Union wanted to destroy an iconic and incredibly competitive British horticulture industry, and see the end of buying British produce.
“But if we cannot ensure access to the seasonal workers needed to produce soft fruit in Britain, that will be an unintended consequence of Brexit, along with soaring prices and increased reliance on imports.”

Laurence, me old pal me old beauty, could I just perform some translation on that for you? here goes…

When our members voted by a majority to leave the EU last Summer in a fit of juvenile nihilistic pique, we didn’t stop to think that it it might destroy much of the British horticulture industry, and see the end of buying British produce.
Now we are crapping in our trousers.If we cannot rely on cheap labor from those countries with weird character sets and odd place names, what the f**k do we do? HELP!


The failure of Jon Ossoff to win in GA-06

The failure of Jon Ossoff to win the special election in GA-06 is a damning indictment of the organizational and campaigning weaknesses of the Democratic Party.
From leading the race by 6 percentage points to losing today in 2 weeks? That takes a serious amount of organizational and messaging incompetence.
Ossoff played the last 10 days like an ultra-careful centrist, trying not to lose. Karen Handel went-all out with ad blitzes and mud-slinging. This was the 2000 Presidential Election all over again.
The Democratic Party has to understand and act on a fundamental reality. If you run down the middle of the road, you will get run over. Every time. Why would people vote for GOP lite when they can get the genuine article?
Here’s the underlying issue that the Democratic Party refuses to address. If you want to get out the vote, you have to run candidates that excite your natural supporters. The collection of milquetoast candidates that the Democratic Party often ends up with in elections do not excite the party base, nor do they impress young people, who will be a key voting group to be energized. Leaving aside ideology, the Republican Party currently does a far better job than the Democratic Party at running candidates that excite their core supporters. They seldom interfere in primary processes, unlike the Democratic Party, which never seems to be able to shake of the machine politics pathology of trying to fix the process to get the result that they think they need. Fixing primary processes may please centrists and establishment figures, but it sends a terrible and de-motivating message to party loyalists and young people, whose tolerance for cynical bullshit is still low, unlike the tolerance levels of the older and more cynical.
In addition the Democratic Party persistently falls prey to the “freezing in sight of the finish line” pathology, and I have seen it happen dozens of times.
1. New candidate is trumpeted by party at start of campaign, jumps out to big lead, looks to have race comfortably in hand.
2. Then suddenly, starting 3 weeks from polling day, candidate suddenly starts to act like they have to capture middle-of-the-road voters. They start talking all manner of conciliatory centrist guff.
3. Opponent goes all out on ad blitzes, FUD and all manner of mud-slinging.
4. Leading candidate determines that “say nothing and take the high road” is the right approach because it makes him or her seem to be statesmanlike and mature. Opposing candidate meanwhile is saying “***k that I’m going to damn well win”.
5. Candidate’s lead shrinks as fear of making a mistake adds to the “don’t piss anybody off” message being whispered in their ear by worried party grandees.
6. Would-be-supporters who were going to vote for candidate decide to not bother because candidate is a wimp. Uncommitted voters look at candidate and opponent and vote for opponent because damm it, they look like a winner.
7. Come election day, our former field-leading hero finishes second.

The inquest usually concludes that candidate was not “moderate” enough, ignoring the reality that at one point the candidate had a large lead, so was a good match most of the way.
The “not moderate enough” verdict is the best one to avoid further unpleasant scrutiny, since it places the blame on the primary electors, not the campaigning or messaging, which usually falls prey to risk-aversion dictated by the party establishment, whose attitude is “we write the checks, you do as we say”.
A new variation on this explanation that I am already hearing is that Jon Ossoff could never have won the seat, since he is not a Republican. The implication being that the seat was always unwinnable by a Democrat. If that was the case, how the hell did tracking polls consistently show Ossoff with a significant lead? A hopeless cause is when you are always behind in the polls, not when you lead by a significant margin until the last few days (see Dais, Wendy). This race was winnable. Ossoff, for reasons that look all too familiar, was unable to hold on to his lead.
If the message is that the Republicans managed to energize their supporters to get out at the last minute and vote, well, time for the Democratic Party to learn how to energize their supporters. (HINT – They won’t do that by telling the candidate to shut up and start trying to not piss off middle-of-the-road voters. You have to get your natural supporters to come out on polling day).


Thoughts on the UK general election results

The results are now complete, with the Conservative Party losing its overall majority (the infamous “hung parliament” scenario). At time of writing, the Conservatives seem to have decided that they can form a government with the help of the Democratic Unionist Party’s 10 members of parliament.
The two biggest unanswered questions that the election result has thrown up are (1) what happens to the UK exit from the EU (aka Brexit) and (2) will a Conservative-DUP coalition be able to survive for any length of time? Thoughts on both topics below.

1. Brexit
I do not understand all of the earnest back-and-forth over “hard” or “soft Brexit (except that it does rather remind me of the discussions over pornography in the 1970’s…but i digress).
The UK has already given notice under Article 50 of its intent to leave the EU. That triggered a 2 year negotiation period. That clock started running a while ago.
The idea that the UK electorate has voted against Brexit, or has somehow voted against “hard” Brexit, makes no sense to me. The electorate could have sent a clear signal that they disapproved of Brexit by voting for candidates from other parties who supported the UK staying in the UE. They did not do so. I therefore have to assume that the UK electorate is either in favor of Brexit, or is resigned to it happening. The electorate voted in a way that weakened both of the pro-EU parties. That is not a “stop Brexit” message.
All of the signs are that the EU is definitely resigned to the UK leaving, and wants it to happen as expeditiously as possible.
As for the hard vs. soft concept…well, the UK has limited leverage in negotiations. When you are trying to leave a club, you don’t have many cards to play. If the UK wants to have an orderly Brexit, it will have to make concessions, A LOT of concessions. Anybody banging on about how the UK can be tough on EU negotiations was clearly asleep when Greece tried to re-negotiate its debt burden, or they came down from the hillside with the last rainstorm.
The UK, in truly petulant fashion, told the EU “We’re leaving” last Summer. The only credible way that the UK would be able to reverse that would have been to elect a coalition government with the Liberal Democrats and the SNP dictating the terms. This did not happen.
Brexit is happening, whether the UK likes it or not. The UK election results changed a lot of UK political dynamics, but they will not change Brexit.
However, nobody in the UK who supported Brexit seems to be able to explain how the UK will create 750+ trading agreements to replace the existing agreements that the EU has with other countries. I call this the Clegg Question. Nick Clegg, who actually knows a lot about the EU, having studied it and worked within it, asked this question last year after the original referendum result, and the question was greeted with The Sound Of Silence, followed by soothing bullshit along the lines of “well of course the rest of the world wants to trade with us!”
In summary, many Brexit supporters seem to be confidently assuming a stampede by other countries to trade with us after the UK leaves the EU, an assumption that has next to no evidence to support it. Many countries that trade with the EU will want to continue that arrangement, the UK being a smaller trading partner than the rest of the EU. I am forced to conclude that a lot of the driver for the assumptions around Brexit is an outdated view not only of how world trade operates, but also of how important the UK is when compared to established trading blocs like the EU, NAFTA etc.

2. The fate of the Conservative-DUP coalition
It is unlikely that any coalition government between the Conservative Party and the DUP will survive more than a few months. The coalition will have only a tiny majority, and unless a working “nod and wink” back-channel arrangement is made with one of the other parties to bolster the majority, It will only take one disagreement between the coalition parties to end the tenure of the government. In this kind of situation, the coalition partner has disproportionate power, and the DUP is not a forward-looking party committed to equal rights for all orientations and groupings, which may lead to problems sooner rather than later.

The UK is a rudderless ship. Markets dislike uncertainty, hence the decline in the value of the Pound during and after the election result declarations.
The reason the ship is rudderless is that the UK electorate has been making bad decisions for the last 10 years. They first turned down the Alternative Vote proposal in a referendum, which would have made the entire electoral system a lot more representative of the voting patterns of the electorate (needless to say, the two existing major parties, beneficiaries of the “first past the post” system, campaigned against AV, successfully).
Then they decided to vote in favour of the UK leaving the EU, in a referendum marked by inept messaging by the Remain groups, and nativist, nationalistic and (in some cases) outright racist messaging by the Leave groups.
Now it is not entirely clear what they have decided. They almost took the car keys away from the Conservatives, but somebody picked them up off the floor and gave them back, with conditions. There are claims that the vote was against Brexit, but that seems illogical. My cynical take is that, overall, the electorate decided it didn’t much care for the Conservative Party’s governance, but is clueless about what to do instead.
The only good aspect of the election is that young people seem to have turned up to vote in large numbers.


Narcissistic leaders – sycophant archetypes

One of the obvious co-morbid behaviors of narcissists is that they surround themselves with sycophants, who are in place specifically to do their bidding.
In the world of showbusiness, the collection of sycophants became known as an entourage, and many celebrities became notorious for the size and bad behavior of their entourages.
In the world of business, entourages are less common, but still can be observed.
However, more commonly the narcissistic corporate leader surrounds him or herself with trusted people who will enable their leadership style, wants and needs. They may not walk around as a pack in public, but everybody soon works out who the sycophants are. This is usually easy to determine, because they go with the leader wherever the leader goes. Within days or weeks of arriving at his or her new job, the sycophants show up, often with new roles for the new shiny improved organization that the leader is usually loudly and rapidly implementing.
The team members for Team Sycophant have to meet some rather elementary behavioral criteria:

– Obeisance
Expected to unquestioningly obey the leader at all times, no matter how bizarre the demand might be

– Unconditional loyalty
Expected to show total loyalty to the leader at all times, publicly and privately

– Impervious to any message not coming from or approved by their leader
Expected to ignore any and all pushback and dissent, and merely to repeat the leadership directions and mantras

In return, sycophants are often very well-paid compared to other members of the corporation’s workforce that their nominal level. However, they owe their position almost entirely to the narcissistic leader’s whim. Narcissistic leaders have a habit of whimsically changing their minds, so sycophants, like courtiers in a medieval monarchy, can fall out of favor and be dispensed with (although, fortunately, literally losing one’s head is not their fate today). A significant portion of their exaggerated remuneration has to be seen as “danger money”.

Sycophants that are brought in by the narcissist fall into one of four general archetypes detailed below.
Sometimes the roles and archetypes are combined. Frequently, the Enforcer and Hatchet-man are the same person, because of the overlap in the required behavior pathology. Sometimes the narcissist retains the role of hatchet-man.

1. The Doer
Doers are the troops for the narcissist to impose his or her will on the corporate group. They are usually young, inexperienced, obedient, and they present themselves as the palatable alternative to the Enforcer. Their interactions become a variant of “Good Cop, Bad Cop”. They would probably not have a role in the organization if the narcissist was not present.
Narcissistic leaders often have a bench of Doers that they can call upon to replace members of the narcissist’s new organization who quit or who are dispensed with.

2. The Enforcer
The Enforcer’s role is to neutralize or eliminate all dissent and ensure total committment by teams to the execution of the leader’s demands. This is achieved by a mixture of intimidation and bluff. The elimination of dissent is usually unsubtle, comprising warnings that dissent will not be tolerated, followed swiftly by the exiling or termination of dissenters. The exiling or termination approach also extends to any team members deemed to be “not with the program”, i.e. insufficiently committed or capable. If they are dispensed with, they are replaced by one or more Doers.
The Enforcer is usually an older person, experienced in project and program management.

3. The Hatchet-man
The hatchet-man is the appointed executioner for the termination or elimination of people who are deemed to be no longer of any use to the leader. This usually involves firing the individuals. The hatchet-man may also be the person responsible for implementing other punitive actions designed to drive out dissenters, such as the elimination or bonuses, denial of benefits, promotions etc.

4. The intellectual
The Intellectual is on payroll to provide concise, plausible-sounding published rationalizations for the actions and direction of the leader covering two main areas:
– Deal Making
Narcissistic leaders often lack any appreciation of strategy, especially if (as is common) they derive their main enjoyment from deal-making. The main strategy of a deal-maker is to make the next deal bigger, and splashier than the last one, or to increase the number of deals, which usually translates to bigger revenues for the employer. The intellectual can provide a convincing post hoc rationalization of the deals that gives the appearance thay they are part of an overall strategy
– Explanation of change orders
Narcissists, lacking impulse control, are prone to issuing demands for changes that are impulsive (i.e. not even half-baked), and expecting immediate action. The intellectual has the job of creating explanations and justifications for the change demands that appear to make sense to an observer that either does not understand the pathology and process at work, or who lacks an inquiring mind.
The Intellectual is often affable, collegial, and, unlike the other three archetypes, superficially collaborative. However, they are still working for the narcissistic leader, and they have no interest in doing what is right, good and proper. Their job is to provide intellectual cover for whatever actions or directions have been demanded by the leader.


“I expect loyalty” and what it really means

One of the common features of communication between humans is the use of what Steven Pinker calls “Indirect Speech”. This comprises one or more statements whose superficial meaning is to be largely ignored, the recipient of the statement(s) is expected to parse and understand the underlying (indirect) meaning.
Two examples suffice:

“Bless his heart”!
Translation: My God that guy is a stupid moron

“Nice little business you’ve got here. Be a shame if something was to happen to it”
Translation: A physical threat, usually based on some combination of revenge, or extortion

Which brings us to the testimony from James Comey today. Apparently one of the things that President Trump said to Comey in his 1:1 meeting was “I need loyalty. I expect loyalty”.
Based on my 39 years in corporations and leadership, if a leader sat me down in a private 1:1 situation, looked at me and said “I expect loyalty”, my first instinct would be to wonder what the leader was about to ask me to do that violated one or both of (a) ethics guidelines, (b) the law.
“I expect loyalty” is not a request for support in this context. It is a demand for unquestioning obeisance.
In this context it was a demand that Comey, by the very nature of his job, could not and should not have been prepared to meet. His loyalty is to the Constitution and the law, not the President, even though he served at the pleasure of the President. Remember that government officials swear in their oath to uphold the Constitution, not be blindly loyal to the POTUS or any other leader.


Gregg Allman

Gregg Allman, the remaining half of the Allman brothers, passed away suddenly last week at the age of 69.
In reality, he had been dodging the Grim Reeper for the best part of 10 years, since discovering that he was suffering from liver failure due partly to Hepatitis C. His prodigious prior alcohol ingestion probably had a lot to do with the liver issue also. After a liver transplant and a difficult recovery, Allman had been touring intermittently, in between further bouts of ill-health.
Many people with drug and alcholol abuse problems are essentially self-medicating to address deep trauma. In Gregg Allman’s case, the trauma dated back to 1971 and 1972.
By the Fall of 1971, the Allman Brothers, the band that Gregg and his elder brother Duane had formed in Jacksonville FL in 1969, had matured into one of the great live musical acts. The band, built around the twin guitar playing of Duane and Dickey Betts, with Gregg providing Hammond organ and gritty vocals, with two touch drummers in Butch Trucks and Jai Johnny Johansen, and with Berry Oakley maturing into one of the great bass players, had toured non-stop for over 2 years, sometimes playing 2 sets a night, and had gradually morphed into an ensemble that was beginning to blur the boundaries between blues, rock and jazz.
The band’s first two studio LPs, “Allman Brothers Band” and “Idlewild South”, contained interesting original compositions that bore only a passing relationship to the blues. Tunes like “Dreams” and “Midnight Rider” impressed fellow musicians, but it soon became clear that the Allman Brothers were a far better live band than a studio band. In the studio, they often sounded stilted and tentative. Live, they soon became a pin-sharp band, capable of playing almost anything and interpreting other people’s tunes in a way that made it sound like only they could have written and arranged them.
Although the band’s initial repertoire was rooted in the blues, the cliched 12-bar blues form soon became a minority part of the band’s book of tunes. In addition to their own tunes, based on other musical forms, or modified blues forms, they also had a book of interpretations of old blues-based tunes, again with modifications to the musical forms.
By the time that Tom Dowd captured the band live at the Fillmore East in early 1971, to create one of the great live rock albums, the band was beginning to move into a zone that made them almost unclassifiable. A tune like “Hot ‘Lanta”, finished literally days before the Fillmore dates, illustrates the direction shift. Based on the blues form, the tune cycles through the theme, solos from the guitarists and the drummers, to a very slow melancholic hanging ending quite unlike any blues band’s standard cliche-ridden ending.
Film and audio records of the Fillmore dates and other concerts from the same time show clearly that although Gregg Allman, by virtue of being the band’s singer, looked and sounded like the frontman, this was Duane’s band. Duane directed the band on-stage, and it is his voice making most of the between-song announcements. Duane was constantly moving forward, in his own playing and with the band’s book of tunes.
And then, everything collapsed. On 29th October 1971, Duane Allman was fatally injured in a motorcycle crash in Macon, Georgia. Just over one year later, Berry Oakley would die in remarkably similar circumstances, also as the result of a motorcycle accident.
Suddenly, the Allman Brothers, who were well-positioned to make a major musical impact, were leaderless. Gregg and Dickey Betts became the leaders of the band after Duane’s death, and replaced Duane Allman’s fiery guitar with the jazz-tinged piano of Chuck Leavell. With Betts now a major compositional force, and taking over a lot of the lead vocals, the band rapidly morphed away from jazz-influenced blues and towards country-rock, becoming the de facto leaders of the whole “Southern Rock” movement of the early to mid 1970s. For several years, the band enjoyed massive success with hits like “Ramblin’ Man” and “Jessica”.
Then, slowly, the band fell apart, and it became clear after the fact that Gregg Allman, like many musicians, had been captured by drink and drugs, from which he had difficulty escaping. He testified against a band roadie to avoid jail time for hard drug possession, which effectively broke up the band in 1975.
After that, Allman embarked on a long period of intemittent activity, blighted by substance abuse. There was a short-lived marriage to Cher, which produced an odd LP “Allman and Woman”, a failed attempt at sounding like Ashford and Simpson. There were Allman band tours, and reformations of the Allman Brothers. The band toured in several incarnations for many years, without or without Dickey Betts.
Listening to a tune like “In Memory Of Elizabeth Reed” 45 years after it was recorded, one is struck by the acuity of the composition and the sheer tightness and pin-sharp playing of the original band, and it is impossible to wonder how great the Allman Brothers could have been as a band without the deaths of Duane Allman and Berry Oakley. Sadly, Gregg Allman probably spent a lot of the rest of his life wondering the same thing, and this may be why he died suddenly a week ago, after a difficult life.


Uber and the Dot Com meltdown – deja vu all over again?

I arrived in the USA in the Fall of 1998, at a time when a revolution was being plotted in start-up rooms, and pitched to eager venture capital firms and private wealth funds.
What was to become known as the Dot Com era was beginning. With the appearance of usable web interfaces around 1996, the Big Idea that germinated in boardrooms was that all manner of business interactions, instead of being conducted face-to-face in what were termed “brick and mortar” locations, or via telephone, would occur via web sites.
The premise was that disruptive innovation was coming to business with consumers via internet-based interaction.
A lot of people loved the idea. In my industry sector at the time, airlines, hotel chains and transportation service providers were rubbing their hands in glee at the thought of being able to sell direct to the public. They were, as they saw it, impeded financially by having to sell via intermediaries such as GDS vendors and travel agents, who all took a percentage of their revenues. With this new model, who needed the grasping middleman? Suddenly, another words was on a lot of people’s lips. Disintermediation.
From my new IT perch in the USA, I watched over the next 2 years as the Dot Com era showed up, grew exponentially, crested, and then imploded. Like all bubbles, it burst spectacularly, with most Dot Com startups being shuttered, sometimes after burning through horse-choking piles of cash before failing (hello WebVan).
There were a whole host of reasons why Dot Com turned out to be a bubble, ranging from ludicrous over-optimism, a total lack of realism (who knew that building scaleable web sites could be..well, kind of difficult), and the presence in the mix of a fair number of bullshitting charlatans all uttering variants of the mantra “if you build it, they will come”.
The Dot Com era is now far enough away in many rear-view mirrors to have been almost forgotten by many people in and outside of IT and Tech. This is not surprising, given the well-documented (and somewhat necessary) tendency of humans to remember Good Stuff and mysteriously fail to remember Bad Stuff.
It is certainly far enough away for start-ups to be able to collect large amounts of VC cash and proceed to burn through it at a merry rate. Just like the Dot Com era, many VC-backed businesses today may never be profitable. I am still trying to fathom if Twitter can ever make money, given that it cannot regulate content, and as I keep saying, all free internet sites eventually suffer from UseNet Syndrome.
One of the most-funded startups toaday is Uber. Like many Dot Com-era businesses, Uber’s value statement is based on disruptive innovation – the ability to call up a taxi ride online, have it arrive quickly, and pay either online or in person. Uber has been expanding rapidly for a few years now. As is normal for what looks like a disruptive technology (certainly disruptive if you are a cab driver in a big city), Uber’s expansion has run into roadblocks, some of them related to the reality that legislation does not have the ability to handle disruptive innovation. Just like the drone/UAS industry, many cities and states are not set up to facilitate an internet-based ride-hailing business, and some of them are hostile (see Austin TX).
However, at the end of the day, Uber has to make money, or it is ultimately doomed. The problem is that it may never be able to make money. Uber’s strategy clearly involves transitioning in the future from owner-driven cars to autonomous vehicles, thus eliminating another intermediary source of cost (the driver). However, given the comment I made about legislation not keeping up with technology, it is not clear how soon that can happen.
This article makes the claim that Uber is actually doomed with its current business model, and may end up as another WebVan. The money paragraph is this one:

…Uber lost at least $2 billion in 2015, a shocking deficit it followed last year with a loss of $2.8 billion — a number that didn’t even include its star-crossed attempt to break into the Chinese market. Much of those losses had come in the form of subsidies: Uber was paying bonuses to drivers to get them on the road and keep them there, while subsidizing rides for users by charging well below the true cost. The idea was to get people so addicted to the Ubering lifestyle that the app would be baked into their lives, to such a degree that no one would much care if and when the subsidies went away and the price went up. Or Uber would simply drown its competitors in cash until the advent of autonomous cars got rid of its biggest cost: drivers.

It’s the Dot Com era all over again – a start-up flush with VC cash is clearly willing to endure massive short-term losses (the amounts of money that Uber is prepared to lose are making WebVan’s losses look like chump change), in the hope of establishing a dominant market position. Baked into the whole current business model is one of the oldest tricks of an aspiring business monopolist (predatory pricing), coupled with an optimistic belief that a disruptive technology (autonomous vehicles) will ride in and Save The Day.
My humble opinion is that Uber cannot succeed as a buisness because it relies on too many cards in its poker deck falling its way. Uber’s claimed market capitalization of up to $60bn is a polite fiction for a business that is losing $2bn a year. Anybody who believes that probably also believes in rainbow pixieland and unicorns, and deserves to be parted from their money.


Round-up – Thursday 1st June

1. US Withdrawal from the Paris Accords – the pathology
On one level, this was predictable.
The prevailing sentiment of the current Administration is based on a combination of anti-globalist sentiment and juvenile petulance. If they think that a treaty, or agreement with another country or group of countries is not equitable for the United States, they just metaphorically sweep the papers off the table, kick over the chair and walk out of the room.
Geopolitics is complex and subtle. Donald Trump and his band of followers lack the ability to understand complexity, and certainly lack any degree of subtlety when dealing with other nations. Of course, among Trump’s supporters, many of whom are deeply skeptical and hostile to globalization (which they blame for loss of jobs in the USA), the decision to leave the Paris Accords is one more sign that Trump Is The Man. The protests and complaints from others will be dismissed as the whinings of the losing elites. (As for the impact on the image of the USA in the rest of the world…pffft. The USA needs to be feared, and if those other freeloaders don’t get that, why…nice little capital city you got there, be a shame if a cruise missile was to hit it…)

2. The Tech sector leadership conundrum and fallout from administration actions
Immediately after the election of Donald Trump, a number of IT and Tech sector senior executives met with Trump. It was obvious why they met with him – Trump was the President-elect, and they needed to try and form a working relationship with the new leader of the Executive Branch.
The decision by those executives put them in an interesting bind. IT and Tech sector employees are generally well-educated, mobile, well-paid knowledge workers. They are generally globalist and forward-thinking in their worldview – and not likely to be supporters of Donald Trump. (anecdotally, most of my current work colleagues are not fans of Donald Trump, and many of them are not GOP supporters).
The tech employers are therefore finding themselves in a scenario where their employees’ value system and their public position of engagement with the Trump administration are at odds. While there is no requirement for employers’ public positions to match the worldviews of their employees, (the primary responsibility of leaders is to the stockholders), it is never a good idea to alienate employees. Tech employees are mobile and have other options.
Which brings us to the of the leading Tech CEOs, Elon Musk, has resigned from his role as a member of the Presidential Council. Robert Iger of Disney has also resigned. This may be the beginning of a wider exodus of business leaders. Most business leaders are not climate change skeptics, and are deeply adverse to uncertainty, which is one of the inevitable outcomes of having a carnival barker in the role of POTUS. The actions of the administration are threatening to global stability,


The outrage over Kathy Griffin and the exaggeration of celebrity impact

There is a lot of nonsense being talked about celebrities in the wake of the controversy over Kathy Griffin’s waving of a fake severed head of Donald Trump.
Celebrities are merely instances of homo sapiens, just like us. To use the old saying, hey put their pants on one leg at a time. They might be well-known public figures, but that doesn’t magically multiply their intellect or wisdom. In fact it may well reduce their overall wisdom, since many celebrities live in a bubble, cut off from the real world as most of us know it. This is one reason why many celebrity utterances sound disconnected from reality.
Numerous instances exist from prior election cycles of electors creating models of Barack Obama being hung in effigy, and Hillary Clinton models in jail clothing, and also a severed head model of Hillary Clinton. The action by Kathy Griffin is not a new development in public discourse. People who deny that reality are unserious partisans, and I have no interest in a debate on that topic.
As is normal when people are informed that their in-group is guilty of equally bad behavior, the people in question have been furiously rationalizing the behavior away. The most common attempted rationalization is that Fred Doe from Upper Podunk, who hung Barack Obama in effigy from his porch, is not a celebrity, unlike Kathy Griffin, so Kathy Griffin’s action is much worse.
This is bullshit. If you attach more importance to the words and actions of a celebrity, you’re the fool here. The USA has a fatal fascination with celebrity, as proven by the tendency of electors to be impressed by all manner of celebrities when they decide to run for elective office. If you buy this rationalization, you are perpetuating that naive fascination. Celebrities are not inviolate idols. They are regular people, and their words and actions should be assessed on that basis. Words can be multiplied across communication channels, but that does not magically convert gibberish to nonsense. (It’s like using ALL CAPS in comments on the internet. It might make you feel more important, but it makes you look like one of a combination of angry, pompous or unable to use a keyboard).
Charles Barkley had a memorable response to some of this a few years ago, when asked whether NBA players ought to be more conscious of being role models in their actions and words because of their impact on young people. “Why should NBA players be role models for kids? What about their parents?” was his response.
Let me be blunt. If you think that the words and actions of a person are any more powerful because they are a celebrity, you’re a dupe for the showbiz approach to the evaluation of facts, truth and what is wise.

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